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hardMCQCUET Accountancy 2022 20 July Shift 12026Accountancy
1 mark

Calculate the amount of cash generated from operations from the following information:
image

  1. A
    Rs. 2,04,750
  2. B
    Rs. 2,14,750
  3. C
    Rs. 2,16,975
  4. D
    Rs. 2,36,975

Solution & Step-by-step Explanation

Operating Profit before Working Capital changes = Rs. 2,00,000 (Already given, so non-cash items like Depreciation and Gain are assumed already adjusted. However, sometimes "Profit before change in WC" means operating profit before WC changes). Let's verify by applying working capital changes directly:Increase in Trade Payables (Add) = + 4,500.Decrease in Inventories (Add) = + 3,750.Increase in Trade Receivables (Less) = - 3,500.Cash generated from operations = .Wait, Option C is 2,16,975. Let's see if 2,00,000 was NET PROFIT, not operating profit before WC changes:Net profit = 2,00,000.Add: Depreciation = 20,000. Add: Interest paid = 2,225.Less: Gain on sale = 10,000.Operating Profit before WC changes = .Add: Increase in Trade Payables = 4,500.Add: Decrease in Inventories = 3,750.Less: Increase in Trade Receivables = 3,500.Cash generated = .This matches Option C. The label "Profit before change in working capital" in the question was loosely used as net profit.

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Calculate the amount of cash generated from operations from the following information:
image
A
Rs. 2,04,750
B
Rs. 2,14,750
C
Rs. 2,16,975
D
Rs. 2,36,975

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